Chapter 3-3 Statute of Repose
| Jurisdiction | United States |
3-3 Statute of Repose
3-3:1 Terminates the Mortgage Lien
In contrast to the procedural nature of the statute of limitations, the statute of repose is substantive. "It provides a substantive right to be free from liability after the established time period."96
The statute of repose terminates the lien of the mortgage when the statutory period expires.97 It "establishes an ultimate date when the lien of the mortgage terminates and is no longer enforceable."98
3-3:2 Repose Time Periods
The time period applicable to a mortgage lien varies, depending on the information "ascertainable from the record of it."99 The applicable period is either five years after the date of maturity or twenty years after date of the mortgage.
3-3:2.1 Five Years After Maturity
If the maturity date is ascertainable from the record of the mortgage, then the repose period is five years after that maturity date.
[B]y the time this action was commenced in March 2002, there was no valid lien to enforce. . . . The maturity date of the note secured by [plaintiff's] mortgage, which may be ascertained from the record, is September 15, 1993. Under section 95.281(1)(a), [plaintiff] had until September 15, 1998 to enforce its lien.100
This five-year time period applies even if the "maturity" date is not stated but is ascertainable only by calculating the date of final payment in a stream of installment payments.101 A mathematical inconsistency in the mortgage document which leaves an unpaid balance at the end of the contractually fixed stream of payments does not render the maturity date unascertainable, at least where the inconsistency was not apparent.102
3-3:2.2 Twenty Years After Date of Mortgage
If the maturity date is not ascertainable, then the repose period is twenty years after the date of the mortgage103 under subsection 95.281(1)(b). Note that when subsection (1)(b) applies, both the starting point and the length of time are different from subsection (1)(a) mortgages.
A clear example of this subsection's operation is Houck Corp. v. New River Ltd., Pasco:
In this case, the mortgage was recorded on November 1, 1984. It secured nonrecourse promissory notes that had a maturity date of October 30, 1991, but that date was not ascertainable from the recorded mortgage, and the notes were not recorded. . . . [Therefore] under section 95.281(1)(b), the mortgage lien was enforceable until November 1, 2004.104
A mortgage that bears no maturity date on its face does not have an "ascertainable" maturity date merely because it incorporates the terms of an unrecorded promissory note that has a stated maturity date.105 Furthermore, a conflict between the maturity stated in the note and the mortgage renders the maturity "not ascertainable" and brings the case under the twenty year repose period of subsection (1)(b).106
When a mortgage secures two obligations, one of which has an ascertainable maturity date from the recorded mortgage and one of which does not, the twenty year statute applies.107 Such arrangements are common in commercial loan arrangements. In CCM Pathfinder Palm Harbor Management, LLC v. Unknown Heirs of Gendron, one secured obligation had an ascertainable maturity, but the second secured obligation did not have an ascertainable maturity. The court held that the twenty year repose period applied.108
3-3:2.3 Extension Agreements
If an agreement extending the maturity date of the obligation is executed and recorded, the statutory repose time periods will run from the new date, as extended.109 However, an unrecorded extension agreement will not extend the repose time period.110
3-3:2.4 Incongruence Between Repose and Limitations
Since the twenty year repose period (applicable when the maturity date is unascertainable) is measured from the date of the mortgage, and the five year limitation period is measured from the date of accrual, incongruent results can emerge.
A mortgage with no ascertainable maturity expires after twenty years, even if it secures a thirty year promissory note. In such a case, the borrower's default in year 21 would not give rise to a foreclosure cause of action because the mortgage lien would have already expired at the end of year 20.111
Conversely, a mortgage lien with no ascertainable maturity that secures a one year promissory note continues as a lien on the...
To continue reading
Request your trial